Private Cloud Build-Out: 4 Prerequisites

Savings is a key reason to move to a private cloud, but shorter development cycles and faster time to market are more significant. Learn from early adopters.

As we've discussed previously, software-as-a-service, engineered stacks and private cloudwill be the biggest IT winners in the next five to ten years. Private clouds hold the most potential -- in fact, early adopters such as JP Morgan Chase and Fidelity are seeing larger savings and greater benefits than initially anticipated.

While savings is a key reason to move to a private cloud, shorter development cycles and faster time to market are more significant. Organizations can test risky ideas more easily as small, low-cost projects, quickly dispensing with those projects that fail and accelerating those that show more promise.

Meantime, early implementations at scale are producing savings well in excess of 50%. This is well beyond my earlier estimate of 30% savings, occurring in large part because of the vastly reduced labor requirements to build and administer a private cloud versus traditional IT infrastructure.

Given those potential benefits, how should an IT department go about building a private cloud? The building blocks are virtualized servers running on commodity hardware. There's also a strong early trend toward leveraging open source software for private clouds, from the Linux operating system to OpenNebula and Eucalyptus for infrastructure management. And of course, you need server engineering and administration expertise to support the platform. But having just a virtualized server platform doesn't a private cloud make.

First, establish a set of standardized images that constitute most of the stack. Preferably, that stack will go from the hardware layer to the operating system to the application server layer, and it will include systems management, security, middleware and database. Ideally, go with a dozen or fewer server images and certainly no more than 20. Consider everything else to be custom and treated separately and differently from the cloud.

Second, build a catalog and ordering process that's easy to use and whose costs are clear.

Third, couple the catalog with highly automated provisioning and de-provisioning. Your objective should be to deliver servers quickly -- certainly within hours, preferably within minutes (once your customer authorizes the costs). De-provisioning should be just as rapid and regular. In fact, you should offer automated "sunset" servers in test and development environments (e.g., after 90 days the servers automatically get returned to the pool).

Fourth, do clear cost and allocation reporting to drive the right user behaviors. Such reporting will encourage rapid adoption, more efficient usage and rapid decommissioning.

With these four prerequisites in place, you're ready to start your private cloud.

Build your private cloud in parallel with your traditional data center platforms. Build both a development and test private cloud and a production private cloud. Seed the cloud with an initial investment of servers of each standard type. Transition demand into the private cloud as new projects initiate, and then proceed project by project.

Speeding up provisioning should shorten development times. Begin by routing small and medium-size projects to the private cloud environment, and as you amass scale and work out the provisioning kinks, migrate more and more server requests until nearly all of them are routed through your private cloud.

As you achieve scale and prove out your ordering and provisioning (and de-provisioning) processes, tighten the criteria for projects to proceed with traditional custom servers. Within six months, custom servers should be the rare exception and you should charge fully for the excess costs they generate.

Once you've established the private cloud, verify the cost savings and advantages. Armed with that data, circle back to existing environments and legacy servers. A good time to transition to a private cloud is during another event (e.g., a major application release or end-of-life server migration). A few early adopters are seeing outsized benefits and a strong developer push into these private cloud environments. So if you build yours well, you should reap the same advantages.

How is your private cloud journey proceeding? Are there other steps necessary for success? I look forward to hearing your perspectives in the Comments section below.

In one sense, savings have little to do with cloud computing. There's nothing in the NIST definition of cloud, which was exhaustive, that mentions savings. Many early private cloud implementers have denied that savings were a primary goal but they still felt compelled to get to cloud operations. On the other hand, it's also clear that the cloud is intended to run highly sophisticated software and get big results on top of commodity parts, Furthermore, as Amazon.com, Facebook and Microsoft data centers illustrate, it will do so in a highly automated fashion. It's implicit that if there are no benefits to these economies of scale -- if there are no savings -- then the cloud is a failure in one of its operational goals.And those savings will materialize. In the long run, everyone will understand that savings is a goal of cloud computing but at the start, we didn't have the means to quantify it.

In the long run, clouds will be interoperable through the translation of virtual machine file formats, a task that falls short of rocket science, but that's not true today. Chris Murphy is right: build in some plan to move workloads out to the public cloud or you will lose one of the benefits of establishing private cloud. See also: "Private Cloud: From Virtualization to Private Cloud in 4 Practical Steps" by Jeanne Morain, Kurt Milne and Andi Mann, via the IT Process Institute.

"Private clouds hold the most potential." This is exactly what I heard from an IBM source reflecting on the giant's cloud business when I was preparing this article http://twb.io/19vgJmt. Question is, when you sell a server to power a private cloud, is that a "cloud" sale in the eyes of the SEC or would be investor. I've also heard people talk about IBM being an arms seller to others fighting the cloud war.

What about planning for connections to public cloud? As the team architects its private cloud platform, it would seem to make sense to consider how easily it would be to shift those workloads to a public cloud, if that becomes a strategic option the company wants to pursue.

Respondents are on a roll: 53% brought their private clouds from concept to production in less than one year, and 60% ­extend their clouds across multiple datacenters. But expertise is scarce, with 51% saying acquiring skilled employees is a roadblock.

Most -- 77% -- of respondents to our 2014 Private Cloud Survey, all from companies with 50 or more employees, have clouds in place now or are piloting. Those without plans may be left at a disadvantage.